Wayne County residents who want to increase their level of financial literacy should familiarize themselves with the ways that consumer bankruptcy can help them eliminate debt. This is arguably the take-home message from a recent study that shows how states with higher levels of financial literacy often have higher levels of bankruptcy filings.
The researchers looked at the rates of personal bankruptcy in each U.S. state. Then, the researchers investigated the degree to which high school students in each state receive education on personal financial matters. Many -- but not all -- states require the teaching of financial literacy to high school students before they graduate.
The researchers discovered that the states that rated highest in financial literacy education also tended to have high rates of personal bankruptcy filings. Meanwhile, many of the states that mandate the least amount of financial literacy education were found to have low bankruptcy rates. Some commentators have chosen to interpret this by implying that states with high levels of financial literacy education just happen to have populaces that are in need of it due to financial recklessness.
But, it seems likely that states with high levels of financial literacy have people who are familiar with how personal bankruptcy can be used for debt relief. After all, many bankruptcy filings are due to high levels of medical debt, not usually accumulated due to financial recklessness. In addition, many other bankruptcy filings are due to bad luck or business reversals that are not the fault of the consumer.
Consumers owe it to themselves to learn more about the potential benefits of bankruptcy. A fresh financial start may be available through that process.
Source: The Deseret News, "High schools fail to teach financial literacy, state by state grading report finds," Eric Schulzke, Nov. 1, 2015